Stock in Focus: Renewable Energy Group Inc. (REGI)

Company Profile:

Renewable Energy Group, Inc. provides lower carbon transportation fuels in the United States and internationally. The company utilizes an integrated production, distribution, and logistics system to convert natural fats, oils, and greases into advanced biofuels. It operates through Biomass-Based Diesel, Services, and Corporate and Other segments. The company produces biomass-based diesel from various carbon feedstocks, including distillers corn and used cooking oils, and inedible animal fats, as well as from soybean or canola oils. It is also involved in the purchase and resale of biomass-based diesel, petroleum-based diesel, renewable identification numbers, California Low Carbon Fuel Standard credits, and raw material feedstocks acquired from third parties; and sale of biomass-based diesel produced under toll manufacturing arrangements with third party facilities using its feedstocks. In addition, the company provides day-to-day management and operational services to biomass-based diesel production facilities; and construction management and general contracting services for the construction or upgrade of biomass-based diesel production facilities. Further, it sells petroleum-based heating oils and diesel fuels, as well as operates fermentation facilities. The company owns and operates a network of 13 biorefineries, including eleven biorefineries located in the United States and two biorefineries located in Germany. Renewable Energy Group, Inc. was founded in 1996 and is headquartered in Ames, Iowa.

Recent News:

On May 20, 2021, the company has closed its previously announced private offering of $550 million aggregate principal amount of 5.875% senior secured notes due 2028 (the “Notes”) in a private placement pursuant to exemptions from the registration requirements of the Securities Act of 1933.

The company reported revenues for the first quarter ended March 31, 2021 were $540 million on 134 million gallons of fuel sold. Net income available to common stockholders was $39 million in the first quarter of 2021, compared to $73 million in the first quarter of 2020.

 

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

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Profitability – Measures the historical price movement of the stock.

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Solvency – Measures the solvency of the company based on several ratios.

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Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

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Conclusion:

REGI’s strengths can be seen in its strong growth, strong profitability and robust solvency compared with its peers. Technical indicators signal the bullish signs, as there is a bullish crossover in Stochastic oscillator, MACD is trying to cross back up and the RSI stands at 53.42 with positive bias. We rate Renewable Energy Group Inc. (REGI) a STRONG BUY.

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